Second quarter 2018
15 August 2018
Second quarter 2018 15 August 2018 Disclaimer This presentation - - PowerPoint PPT Presentation
Second quarter 2018 15 August 2018 Disclaimer This presentation and its enclosures and appendices (jointly referred to as the Presentation) has been produced by Asetek A/S (the Company) and has been furnished to a limited audience
15 August 2018
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This presentation and its enclosures and appendices (jointly referred to as the “Presentation”) has been produced by Asetek A/S (the “Company”) and has been furnished to a limited audience (the “Recipient[s]”)on a confidential basis in connection with a potential securities issue by the Company. The content of this Presentation is not to be construed as legal, business, investment or tax advice, and has not been reviewed by any regulatory authority. Each Recipient should consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. The information cannot stand alone but must be seen in conjunction with the oral presentation and are expressed only as of the date hereof. The Presentation may include certain statements, estimates and projections with respect to the business of the Company and its anticipated performance, the market and the competitors. 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companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (financial promotion) Order 2001 (as amended) or who are persons to whom the document may otherwise lawfully be distributed. This Presentation may only be distributed in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended). The contents of this Presentation shall not be construed as legal, business or tax advice. Each reader of this Presentation should consult its own legal, business or tax advisor as to legal, business or tax advice. If you are in doubt about the contents of this Presentation, you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser. This Presentation is subject to Danish law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Danish courts.
Listed on Oslo Børs OSE4520 Technology Hardware & Equipment Business Provider of liquid cooling solutions for data centers, servers and PCs Sales Q2’18 USD 19.5 million / H1’18 USD 33.4 million Operating profit Desktop PC segment Q2’18 USD 5.9 million / H1’18 USD 9.9 million Data center segment Q2’18 USD (2.1) million / H1’18 USD (4.3) million Market cap USD ~275 million / NOK ~2.2* billion
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* 1 USD = NOK 8.35 (14 AUG. ‘18)
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Aalborg (Denmark) R&D and Engineering In-house manufacturing Testing Management Taipei (Taiwan) Sales Xiamen (China) Engineering Outsourced manufacturing Quality control Munich (Germany) Sales and marketing Silicon Valley (USA) Sales and marketing Government relations Texas (USA) Sales and marketing
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R&D Engineering Manufacturing Quality control Sales & marketing OEM clients End users IP
Aalborg | Xiamen Aalborg | Xiamen Silicon Valley | Texas Munich | Taipei Desktop OEMs Data center OEMs Proprietary & patented technology 5.4m liquid cooling units shipped Company facts Listed on Oslo Stock Exchange (Oslo Børs) FY’17 sales of USD 58 million FY’17 adjusted EBITDA of USD 6.8 million 94 employees
Integrated value chain
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Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
Asetek liquid cooling units shipped
Cumulative total number of million units 5.4 4.2 3.2 2.4 1.9 1.5 1.1 0.7 0.3
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75% vs. Q2’17
for its first liquid coolers
between 15% to 25%
10.147 15.614 16.412 13.208 18.288 1.000 2.038 1.512 660 1.248 11.147 17.652 17.924 13.868 19.536
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
Desktop Data center
Group revenue
USD thousands
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IP Platform Business segments Market Q2’18 financials
Applications Technology Systems Products Patents High Volume manufacturing WW hub infrastructure
Desktop PC
94% of revenue USD 5.9m of EBITDA
Data Center
computing (HPC)
computing 6% of revenue USD (2.1m) of EBITDA
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DESKTOP SEGMENT
6.343 7.376 9.346 7.374 5.704 9.843 13.417 9.009 7.503 13.271 13.296 10.191 14.896 7.679 9.440 11.615 9.414 7.585 12.431 16.322 11.054 10.147 15.614 16.412 13.208 18.287 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
Quarterly desktop revenue
USD thousands D I Y Gaming/Performance DT
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DESKTOP SEGMENT
Do-It-Yourself PC enthusiasts / gamers 81% sales OEM Gaming Desktop PCs 19% sales
Shipped 319,000 desktop units in Q2 2018
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DESKTOP SEGMENT
ASUS selects Asetek’s newest generation design for its first liquid coolers
expanding its Republic of Gamers (ROG) ecosystem utilizing Asetek’s solutions
solution
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product launches from Corsair as well as unusually high demand for certain existing products
bringing new products to market, PC Enthusiasts, Gamers and eSports Professionals tend to postpone upgrading their PCs leading to a slowdown in the market which in turn creates revenue variability
DESKTOP SEGMENT Desktop outlook
the level achieved in Q3 2017
increase from the levels achieved in Q3 2017
full-year revenue growth may shift towards the lower-end
Desktop revenue drivers
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DATA CENTER SEGMENT
36 165 603 539 575 253 162 151 331 517 862 990 771 1.818 1.589 417 1.000 2.038 1.512 660 1.248 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
Quarterly data center revenue
USD thousands
Announced May 4, 2018
Follow up order from Penguin Computing
D2C coolers and loops for further build-out of an undisclosed U.S. Department of Energy High Performance Computing (HPC) installation
Announced May 16, 2018
Order from Fujitsu for new HPC cluster
cooling solution throughout the cluster which includes 1300 Direct-to-Chip (D2C) coolers for the cluster's compute nodes
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DATA CENTER SEGMENT
Undisclosed High Performance Computing (HPC) cluster in Japan Undisclosed U.S. Department of Energy High Performance Computing (HPC) installation
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5.000 10.000 15.000 20.000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Desktop (Year 1 = 2007) Data Center (Year 1 = 2013)
Quarterly revenue development since commercialization
USD thousands
Year 12
increased shipments in the do-it-yourself (DIY) market
Q1’18
Q1’18
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FINANCIALS
10.147 15.614 16.412 13.208 18.288 1.000 2.038 1.512 660 1.248 11.147 17.652 17.924 13.868 19.536
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
Desktop Data center
Group revenue
USD thousands
FINANCIALS
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10% 20% 30% 40% 50% Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Group gross margin Desktop gross margin Data center gross margin 2.794 5.081 4.732 4.026 5.889
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018
Desktop Datacenter
desktop activity
Group EBITDA development
USD thousands
Gross margin development
past experience
recent quarters
by two larger projects
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FINANCIALS
Q2 2018 Q2 2017 USD (000’s) Group Desktop Data center Group Desktop Data center
Revenue 19 536 18 288 1 248 11 147 10 147 1 000 Gross Margin 35.8% 36.6% 23.2% 35.0% 37.0% 15.0% Other operating expenses 3 163 813 2 350 2 748 960 1 788 EBITDA adjusted 3 828 5 889 (2 061) 1 156 2 794 (1 638) Depreciations 993 367 626 631 296 335 Share based compensation 169 42 127 330 111 219 E B I T 2 666 5 480 (2 814) 195 2 387 (2 192) EBIT Margin 13.6% 30.0% N/A 1.7% 23.5% N/A HQ, Litigation expenses 344 448 HQ, Settlement received
HQ, Share based compensation 78 161 HQ, Other 580 267 Headquarters costs 1 002 225 EBIT, total 1 664 (30)
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FINANCIALS
USD (000's) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Income (loss) for the period 2 143 (962) 3 573 1 376 (625) Depreciation, amortization and impairment 993 848 704 712 631 Finance cost (income) and taxes 271 10 (3 040) 22 10 Share based compensation 247 413 482 552 491 Changes in current assets other than cash (5 520) 3 412 (878) (2 584) (198) Changes in payables and accrued liabilities 2 379 (4 004) 731 2 387 2 576 Net cash provided (used) in operating activities 513 (283) 1 572 2 465 2 885 Additions to intangible assets and other assets (313) (482) (613) (748) (674) Purchase of property and equipment & other assets (464) (749) (600) (410) (637) Net cash used in investing activities (777) (1 231) (1 213) (1 158) (1 311) Proceeds from debt issuance, other LT liabilities Cash flows on credit lines/debt/lease (63) (91) 291 (268) 286 Issuance of capital / conv debt / dividend 289 410 (262) 45 (2 281) Net cash provided (used) by financing activities 226 319 29 (223) (1 995) Effect of exchange rate changes on cash (806) 529 271 401 491 Net changes in cash and cash equivalents (844) (666) 659 1 485 70 Cash and cash equivalents at beginning of period 17 732 18 398 17 739 16 254 16 184 Cash and cash equivalents at end of period 16 888 17 732 18 398 17 739 16 254
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Non-current assets Equity Current assets Cash Non- current liabilities Current liabilities
Current assets Cash Non- current liabilities Current liabilities
Non-current assets Cash Equity Current liabilities Current assets
financial flexibility
FINANCIALS
Non-current assets Equity Non- current liabilities Current liabilities
Current assets Cash Non- current liabilities Current liabilities
5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 50.000 Assets Equity and Liabilities Non-current assets* Cash Equity Non-current liabilities Current liabilities Current assets
Balance sheet composition
USD thousands
* Non-current assets contains mainly capitalized R&D and deferred taxes
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Continue to dominate the desktop liquid cooling market Goal Strategy
Strategic platform
Do-It-Yourself PC enthusiasts 81% sales Gaming and Performance Desktop PCs 19% sales
Outlook
2018 desktop revenue growth expectation of between 15% and 25% over 2017
DESKTOP SEGMENT
* Update to full year 2018 desktop revenue guidance announced 15 June, 2018
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Exploit established leadership within HPC Create a meaningful and profitable business Goal Strategy Increase end-user adoption with existing OEMs Add new OEMs Explore potential opportunities to grow beyond the HPC segment Outlook
Data center revenue expected to be on level with 2017
DATA CENTER SEGMENT
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Figures in USD (000's) Q2 2018 Q2 2017 1H 2018 1H 2017 2017
Unaudited Unaudited Unaudited Unaudited
Revenue 19 536 $ 11 147 $ 33 404 $ 22 618 $ 58 194 $ Cost of sales 12 545 7 243 21 458 14 299 37 225 Gross profit 6 991 3 904 11 946 8 319 20 969 Research and development 1 437 1 007 2 559 1 890 4 220 Selling, general and administrative 3 890 3 578 8 105 6 831 14 905 Other expense (income)
(913) Total operating expenses 5 327 3 934 10 664 8 070 18 212 Operating income 1 664 (30) 1 282 249 2 757 Foreign exchange (loss) gain 764 (562) 194 (672) (1 239) Finance income (costs) 53 (3) 43 (12) (19) Total financial income (expenses) 817 (565) 237 (684) (1 258) Income before tax 2 481 (595) 1 519 (435) 1 499 Income tax (expense) benefit (338) (30) (338) (39) 2 976 Income for the period 2 143 (625) 1 181 (474) 4 475
Other comprehensive income items that may be reclassified to profit or loss in subsequent periods:
Foreign currency translation adjustments (1 088) 733 (171) 727 1 253 Total comprehensive income 1 055 $ 108 $ 1 010 $ 253 $ 5 728 $ Income per share (in USD): Basic 0.08 $ (0.02) $ 0.05 $ (0.02) $ 0.18 $ Diluted 0.08 $ (0.02) $ 0.04 $ (0.02) $ 0.17 $
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Figures in USD (000's) 30 June 2018 31 Dec 2017 ASSETS
Unaudited
Non-current assets Intangible assets 2 495 $ 2 754 $ Property and equipment 4 156 3 856 Deferred income tax assets 7 635 7 778 Other assets 314 794 Total non-current assets 14 600 15 182 Current assets Inventory 3 016 2 316 Trade receivables and other 15 150 13 280 Cash and cash equivalents 16 888 18 398 Total current assets 35 054 33 994 Total assets 49 654 $ 49 176 $ EQUITY AND LIABILITIES Equity Share capital 422 $ 419 $ Retained earnings 34 510 31 976 Translation and other reserves 830 999 Total equity 35 762 33 394 Non-current liabilities Long-term debt 644 816 Total non-current liabilities 644 816 Current liabilities Short-term debt 1 016 1 051 Accrued liabilities 1 745 2 432 Accrued compensation & employee benefits 1 304 1 335 Trade payables 9 183 10 148 Total current liabilities 13 248 14 966 Total liabilities 13 892 15 782 Total equity and liabilities 49 654 $ 49 176 $
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Unaudited
Figures in USD (000's) Share capital Translation reserves Other reserves Retained earnings Total Equity at January 1, 2018 419 $ 1 005 $ (6) $ 31 976 $ 33 394 $ Total comprehensive income - six months ended June 30, 2018 Income for the period
1 181 Foreign currency translation adjustments
Total comprehensive income - six months ended June 30, 2018
1 010 Transactions with owners - six months ended June 30, 2018 Shares issued 3
693 698 Share based payment expense
660 Transactions with owners - six months ended June 30, 2018 3
1 353 1 358 Equity at June 30, 2018 422 $ 834 $ (4) $ 34 510 $ 35 762 $ Equity at January 1, 2017 417 $ (248) $ (9) $ 28 130 $ 28 290 $ Total comprehensive income - six months ended June 30, 2017 Income for the period
(474) Foreign currency translation adjustments
Total comprehensive income - six months ended June 30, 2017
253 Transactions with owners - six months ended June 30, 2017 Shares issued 1
440 444 Share based payment expense
563 Dividends
(2 907) Transactions with owners - six months ended June 30, 2017 1
(1 904) (1 900) Equity at June 30, 2017 418 $ 479 $ (6) $ 25 752 $ 26 643 $
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Large and growing markets Supplying global brands Market leading solutions Strong IP Profitable growth